Refineries have to focus on petrochemicals to survive

India is on the cusp of a big transition in ­energy. The target is to have an all-electric fleet by 2030. This will have big implications for the consumer as well as for the larger macro-economy. Let’s try to imagine what we can expect in the medium term. The Indian market will start to change by 2022 and my gut feeling is that metros will shift to electric cars. Rural areas will still largely have int­ernal combustion engines (petrol and diesel vehicles) and that too will change completely by 2050. Crude prices will start to fall with this change and could hit the $10-20 per barrel benchmark, dep­ending on the market forces.

In another five years, technology will become very cheap—maybe just 10 per cent of the present cost—and it will be economically driven. The combination of electric vehicles and driverless cars is a deadly one that could eliminate even individual ownership of cars. Hiring an autonomous or driverless car will become so cheap and readily available that people wouldn’t need to buy cars. That’s where the current research is focused and that’s where the market is eventually headed.

In India, consumers may initially continue to be attracted to the idea of owning cars. That is an ego issue, but eventually we will move towards renting cars because that is where the business model will evolve. The other big change will be that transport cost will come down substantially, because electric vehicles will be very efficient. Electric cars will cost nearly as much as conventional cars or even less.

There was a time not long ago when the oil industry was concerned about how long the oil would last. High investments were made in deep sea exp­loration and many initiatives were taken to conserve oil. But recent developments in the electric-­car industry have shifted the concerns alt­ogether. With these developments, oil is exp­ected to last as long as the refineries last.

The Indian refining sector is going ahead with its expansion plans, focusing on diversions to the petrochemical sector to reduce the shocks to the minimum. Petrochemical industries and refining will move towards petrochemical products that will go into consumer goods. Some Indian ref­ineries have already started investing in the petrochemical products in India, in anticipation of the impending changes.

With ­electric ­vehicles ­ruling the roads, crude prices could fall and hit the $10-20 per barrel benchmark.

So far, all changes in the auto sector were driven mostly by regulations on statutory and environmental considerations. But now the changes due to electric cars will be driven by economic considerations. This means it will be driven by customers. Hence it will happen voluntarily and much faster. The cost per kilometre of the new electric cars is expected to be less than 10 per cent of what it is now.

Back in the 1980s, refineries invested heavily to maximise middle distillates by installing fluid catalytic cracking units or hydrocrackers. Now they will have to try out technologies to break down the middle distillates to further lighter ends, and then to petrochemicals. India is much dependent on LPG and the second largest importer in the world. Large investments would be needed in the refineries to sustain operations. There would also be pressure to reduce the project planning and execution cycle as the change will happen sooner than anything seen before.

(The writer is an oil industry expert who has headed refineries in India and abroad.)

As technologies to tap the sun and store its energy become more efficient, we are already on our way to an ­incredibly ­energy-affluent world. And chances are we might arrive there before ­development driven by fossil fuels brings on a ­c­limate-change apocalypse.

As the government's focus has shifted to R&D at ISRO's Vikram Sarabhai Space Centre, centre's director Dr K. sivan says that the process of transferring the technology to industry for use in electric vehicles is on.